Russia’s oil output up by 400,000 barrels in past two years, Russian Energy Minister Alexander Novak said at a ministerial session of the CERAWeek conference

Russia’s oil and gas sector has got over the U.S. sanctions successfully and increased oil output by 400,000 barrels in the past two years, Russian Energy Minister Alexander Novak said at a ministerial session of the CERAWeek conference on Monday.

"Despite the sanctions that were imposed on a number of our companies, our oil and gas sector has managed not only to overcome the difficulties but even to demonstrate positive dynamics. In the past two years, Russia’s oil output has gone up by 400,000 barrels," he said.

"The financial status of our companies is much, much better than of many foreign companies," he said. "They have a small debt load, the debt/EBITDA ration of less than 1, and a small credit indebtedness."

"Our companies have managed to build up the output volumes and, on top of that, to raise efficiency and to bring down the prime costs that stand at $ 10 to $ 15 per barrel on the average," Novak said. He said the returns on Russian oil and gas projects were among the world’s highest.

Russia’s Energy Ministry sees big interest from American companies to investing in Russia, Alexander Novak said. "Naturally, today we are having contacts with many businessmen and we feel big interest to Russia," he told the CERAWeek conference.

On OPEC membership

Moscow is not mulling OPEC membership, yet it believes cooperation with the oil cartel should develop, Novak said. "Let me put it frankly, we’re not considering a possibility of Russia’s membership of OPEC but our collaboration with oil exporting countries has proved to be important and rational," he said.

He stressed the need for cooperation with OPEC, adding that its absence resulted in a shortfall of about $ 500 billion of investment in the global oil industry in recent years.

On gas

Russia will account for 15% of the LNG market by 2040, Novak said. "Our strategy provides for an eight-fold increase of LNG production in Russia by 2040. Whereas Russia’s current share of the LNG market is about five percent, we plan to increase it to 15%," he said at a CERAWeek conference in Houston.

Global gas consumption will increase by two trillion cubic meters by 2040 to reach 5.5 trillion cubic meters, Russian Energy Minister said. "Whereas the current gas consumption is about 3.5 trillion cubic meters, by the year 2040 it is to go up to 5.5 trillion cubic meters. Correspondingly, this much of gas is to be produced which requires big investments," he said at a CERAWeek forum in Houston.

On Russia's hydrocarbon reserves

Russia’s hydrocarbon reserves are enough for at least 50 years, the Russian energy minister said .

"We have reserves of oil and gas that will be enough for more than 50 years and it said about proven reserves only. Huge potential is on the shelf, in Arctic. We have other projects that will be implemented in future," he said.

Novak believes that the share of hydrocarbons will reduce but insignificantly - to 75% from 80% Somewhat earlier, Novak said the output capacity of power generating facilities based on renewable sources of energy might reach 3 or so percent of the current installed capacity of power plants by 2024 while the demand for hydrocarbons would continue growing through to 2040 as a minimum.